Self-employment becomes only option as salaried labor drops

Policies pursued by successive Greek governments in the past few years have led to a significant reduction in salaried employment – which now accounts for 65.89 percent of total employment in the country, against the European Union average of 84.74 percent and over 85 percent across the eurozone – and a resultant increase in self-employment.

From 2008 to 2015, salaried employment dropped by some 645,000 people, mainly due to successive waves of sackings. For thousands of salaried workers who suddenly found themselves out of a job, self-employment was seen as the only option.

Hikes in taxes, moreover, leave little scope for an expansion of salaried employment. It is estimated that the sum withheld from the salary of a worker in a new job exceeds 40 percent, even for those at the bottom end of the wage scale. On the other hand, excessive taxation has pushed the vast majority of self-employed professionals to tax evasion.

All this serves to explain why one in three Greeks is self-employed, a rate far above second-placed Italy with 22.1 percent, according to Eurostat data.

Greece’s creditors have repeatedly stressed this Greek peculiarity in their reports and applied pressure so that efforts to reduce unemployment are based primarily on salaried employment, even if it is on a part-time basis.

However, the policies implemented have not helped and it will be very difficult for this balance in the labor market to shift in the next two or three years at least. Statistics show that a small increase in employee figures compared to 2013 is thanks to the part-time hirings.

Eurostat has found that the number of salaried workers, both in the public and private sectors, came to 2.34 million in Greece in end-2015, with the public sector employing almost 680,000 people, despite the reduction attributed to retirements in recent years. The numbers show that state workers have seen their share increase in the total employment pie, as one in five employees receiving a salary works in the public sector. We can therefore condlude that the anemic private sector is responsible for Greece ranking last across Europe in salaried workers.

Self-employed professionals in Greece came to 1.06 million in 2015, dropping by 225,000 since 2008.